Companies

Steelmakers sound alarm over rising level of duty-free imports

Suresh P Iyengar Mumbai | Updated on July 28, 2019 Published on July 28, 2019

Notwithstanding slowing domestic demand, steel companies have raised concerns over rising steel imports at 0 per cent duty from countries such as Japan and South Korea that have signed a free trade agreement.

Steel imports in the June quarter were down 9 per cent at 1.72 million tonnes, while exports declined 27 per cent to 1.02 mt.

In the financial year ended March 2019, imports were up 5 per cent at 7.84 mt, while exports plunged 34 per cent to 6.36 mt.

Though, overall, steel imports to India have fallen due to weak demand, the proportion of duty-free imports has increased to 66 per cent from 60 per cent in the June quarter.

Amid growing import worries, the steel industry has urged the government to keep steel out of the proposed 16-member Regional Comprehensive Economic Partnership (RCEP) negotiations, which is to begin later this week.

Negative list

Seshagiri Rao, Joint Managing Director, JSW Steel, said trade bodies have asked the government to keep steel under negative list in the RCEP negotiations, as it will open duty-free access for three more countries, including China.

Indian steel industry’s competition with China will not be a level-playing field, as they provide lot of implied subsidies to boost exports, he said.

Moreover, he added that once the industry is hurt by Chinese imports, India takes a lot of time to react and implement trade barriers.

Despite the global slowdown, steel production in China continues to peak, touching a high 89 mt in May and falling marginally to 87 mt in June.

In the first five months of this year, global steel production is up five per cent, but is almost flat excluding China, which alone recorded a production growth of 10 per cent compared to last year.

However, China has not exported much of its production due to the ongoing global trade war.

Moreover, steel prices fell sharply in the US by 30 per cent and between 5-10 per cent in Europe and China.

Published on July 28, 2019
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